Louisiana officials should be encouraged by steel maker Nucor Corp.'s decision to begin buying land in St. James Parish for a proposed $4 billion iron and steel manufacturing plant.

The firm made it clear the land deal does not mean it has decided whether to build the project in Louisiana or Brazil, the other location under review. But the company's purchase of 890 acres near Convent is the strongest signal yet of the firm's serious consideration of Louisiana's site.

That should be more than enough for state lawmakers to abandon plans to plug some of the looming budget shortfall by depleting an economic development fund needed to seal projects like Nucor's.

The North Carolina company has said it prefers the Louisiana site for a plant that would manufacture pig iron, a material used in steel products. The project could later expand to include a steel plant and employ 1,250 workers. That would make Nucor's investment one of the largest in the state in years.

But in February the firm delayed a decision on the plant, citing the global economic downturn. It also said it will wait for state and federal environmental permits to be granted, and state and federal environmental officials must work diligently to process the firm's applications.

State officials can't affect the world's economy. But they can be ready for Nucor if the firm decides to come to Louisiana. That means reserving some of the state's industrial-incentives fund.

After allocations for other economic development projects, the fund will have $186 million left. Some lawmakers are hungrily eyeing the money to pay for transportation projects and for state operations. But Gov. Bobby Jindal is urging legislators to protect those funds -- and the governor is right.

Louisiana's bonding capacity has been stretched thin after Hurricane Katrina, meaning the state could find it difficult to borrow hundreds of millions of dollars for a mega project. That's why it's important to reserve money in the incentives fund for worthwhile efforts to lure or retain jobs here.

It remains to be seen whether Nucor will pick Louisiana or when the firm will made a final decision. But Louisiana should be ready if the firm comes our way.